New jobs arrive, but old pay lags behind

Compared with the rest of the country, Minnesota's employment rebound from the Great Recession has been above average, with the state's total number of jobs back within shouting distance of its pre-recession level.

But beneath the improvement in the state's labor market, concerns remain that the jobs replacing those that were lost aren't of the same quality.

State wage data indicate that the pay for many new jobs hasn't kept up with inflation as the economy has improved. And some employment sectors that have shown the best average wage gains in the recovery, such as manufacturing,may attribute those increases -- in part -- to the well-paid workers who remained after lower-paid jobs were eliminated at the start of the recession, in turn driving up a workplace's average wage.

While there's clear evidence of improving job prospects for Minnesotans, economists also point out that in many fields, there's ample competition for jobs from recent college graduates and the unemployed, and there's often a mismatch between workers' skills and the open positions.

The end result is a pool of unemployed workers that totaled 161,000 last month. That's down from the recession's May 2009 peak of 246,900 unemployed. But larger forces in the economy continue to prove challenging to job hunters.

WHAT DRIVES HIRING

"Companies have been sitting on the sidelines for a long time, and they're sitting on a lot of cash," said John Budd, a University of Minnesota professor and labor relations specialist.

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Employers are hesitant partly because of uncertainty about the economy and the political outlook in the country, he said.

"But that was more of a compelling story 24 months ago," Budd added. "I don't know what more they're looking for."

A wage analysis by Minnesota's Department of Employment and Economic Development, completed last summer, showed that between 2006 and 2011, the bottom 20 percent of Minnesota wage earners saw the steepest decline in real wages (money earned minus inflation). In fact, by 2011, only Minnesotans in the 70th percentile of wage earners and above (those individualsmaking more than $56,275 per year) had seen their overall wages increase since 2006.

"We're seeing that wage inequality is increasing," said Oriane Casale, assistant director of labor market information for the state.

The same DEED study found that the improving unemployment rates "disguise a hidden trend of people who are underemployed in terms of hours and pay, or who are working in jobs that aren't on par with the ones they lost during the recession."

Other economists have pointed out that American corporations have been able to meet relatively lukewarm consumer demand domestically without ramping up hiring, and that consumer spending needs to spike before a big wave of hiring is likely.

Until there's some push-back from workers who are increasingly being asked to do more with less, "companies will continue to get by with their current staffing levels," Budd said. "Maybe to their own detriment."

HEALTH CARE HIRING

Between the third quarters of 2007 and 2012, average weekly wages in Minnesota rose 11.1 percent, slightly better than inflation, according to state data.

But some of the job sectors that added the most jobs between 2007 and 2012 were those that didn't show strong wage growth. Those include educational services, health care and social assistance jobs, retail and spots in management.

Each of those sectors, such as health care, covers a wide variety of jobs, some requiring advanced degrees and others that ask only for a high school diploma.

One of the state's largest health care providers, Minneapolis-based Allina, has been boosting its job numbers at a steady clip in recent years.

In 2011, Allina saw its heaviest volume of hiring since 2006, and 2012's hiring "was right behind it," said Scott Hamman, director of Allina's recruitment center. In the first quarter of 2013, the company filled 47 new jobs, and that doesn't count replacements for employees who left existing positions, he said. Allina employs about 25,000 in the Twin Cities.

Allina has added nurse practitioners, physician assistants and physicians in family practice and internal medicine. Registered nurses who act as care navigators for patients receiving treatment for cancer or other conditions also have seen their numbers grow.

For specialty care positions or jobs requiring an advanced degree, "we're at a point where those are difficult to fill," Hamman said. "We continue to see applications come through, but to get the right person in some of those roles" can be a struggle, he said.

Even though health care is a growing part of the state's labor force, getting hooked up with the right job still can be difficult. Career counselors who work with the unemployed say job hunters need persistence and a relentlessly positive outlook.

Sadia Nor, who was laid off from a job as a part-time personal-care assistant last summer, was able to find a replacement job in a health clinic. In her new position at the Eagan Child and Family Clinic, in Burnsville, she records patients' height and weight and takes their vital signs at the start of their office visit.

The new job pays better than her previous one, she said. But it took her six months -- and a tip from a friend -- before she found it.

Nor, 29, has a three-year degree in medical assisting. The clinic offers more stability and flexible part-time hours, she said. Nor has three children -- the youngest is 2 -- and her husband is finishing coursework at the University of Minnesota, so she needed flexibility in her schedule.

She had been looking for work with assistance from the Minnesota State Workforce Center in Dakota County. While she ultimately ended up with three job offers, it was a friend who was a patient at the Burnsville clinic who told her about the opening there.

The clinic has a sizable number of patients of Somali descent, and Nor, also of Somali descent, said she's fortunate to be able to help her community. Her other two job offers were also good, "but here at this clinic I felt more connected," she said.

QUALITY OF JOBS

Since 2007, the sectors in Minnesota with the largest gains in average weekly wages include mining, manufacturing and real estate.

Industry experts say part of the explanation involves the low-wage jobs lost during the recession and the higher-wage work that remains. In manufacturing, for instance, workers who are trained to run high-tech equipment -- such as computer numeric-control machine tools -- may have better odds of finding work. And those jobs pay better than other manufacturing work.

Also, the number of hours worked per week can rise, which also inflates the average weekly wage, said Steve Hine, director of the state's labor market information office. With fewer people on the job, it follows that the remaining workers could have to put in longer hours to get the work done.

Another indicator of the quality of available jobs is the state's job vacancy survey, which found that in the fourth quarter of 2012, part-time and temporary jobs accounted for 53 percent of all openings.

While that sounds high, it's essentially the same level as the second quarter of 2007, before the recession, when 52 percent of openings were for part-time and temporary work. In the depths of the recession, it was much worse: 68 percent of Minnesota's job openings in the second quarter of 2009 were for part-time or temporary jobs.

Throughout the recession, Minnesota's employment picture remained brighter than the nation's as a whole. The state's unemployment rate -- now at 5.4 percent -- remains lower than the national figure of 7.5 percent reported Friday, May 3.

Economists point to the state's diversified economy and its educated workforce -- 38.5 percent of Twin Cities' residents had a bachelor's degree or better in 2011, making this the fourth-most-educated metropolitan area out of the nation's 25 largest.

But the state isn't thought to be immune from larger shifts in the economy.

Nationally, a study of census data found that while mid-wage occupations accounted for 60 percent of the jobs lost in the recession, they've made up only 22 percent of the job growth in the recovery. These include electricians, office managers and truck drivers, among others.

The same study, done last year by the National Employment Law Project, found that food service, retail and employment-service jobs made up 43 percent of net employment growth since the recession.